Exciting plans underway for Spidernet
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PrimeTel, the alternative telecommunications provider offering its Triple Play service of telephony, Internet and television, is preparing the ground to become a public company in anticipation of a flotation on the Cyprus Stock Exchange.
Hermes Stephanou, the Managing Director of PrimeTel, said the final decision will also depend on the intentions of the Electricity Authority of Cyprus (EAC), which has an option to buy up to 40% of PrimeTel.
PrimeTel is presently 93%-owned by Teledev East, the Cypriot telecom multinational active in
The main shareholders of Teledev East are Francoudi & Stephanou and Pericles Manglis Group, while smaller stakes are held by the Tseriotis family, the Cyprus Development Bank and Alco Products.
The EAC option to take up to 40% of the company’s stock, which was initially signed for a five year term, expires in 2008 and among others stipulates that PrimeTel should give a six month notice to the EAC for the public utility to exercise the option if PrimeTel decides to seek a public listing.
Reliable sources have told the Financial Mirror that the EAC may decide not to exercise the option on the argument that a public organisation should not acquire a minority stake in a private company. Efforts by the EAC to acquire a majority stake have been rebuffed by the other shareholders of PrimeTel, who insist the prospects are favourable enough to attract other institutional investors to join the new telecoms, leisure and Internet grouping now being formed.
Thunderworx, an ISP company which formerly belonged to the Francoudi & Stephanou Group, was sold to Teledev East, and the two have merged completely.
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Spidernet prospects
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Meanwhile, the CSE-listed Spidernet Pcl (SNET) which is 70% owned by HNS, the privately held company controlled by Hermes Stephanou, is reported to be proceeding with takeovers of its own as well as an ambitious capital increase plan, which will allow for more acquisitions.
“It is obvious that we want to build sufficient size and diversification to compete against CyTA by bringing many companies of the same sector under the same umbrella,†said Stephanou, adding that the next phase will be to share resources and synergies for the benefit of the companies but also the consumers, since efficiencies in a competitive environment usually lead to lower prices.
“We proved our commitment to offering new and innovative products priced competitively by offering our Triple Play (fixed telephony, fast and continuous access to the Internet and home entertainment services like TV, movies and video-on-demand through a single connection) through PrimeTel.â€
Stephanou declined to confirm or deny rumours that Spidernet has already acquired NetWay, an start-up company active in providing advanced Internet services, pointing out that the Spidernet prospectus for the planned capital increase clearly states that part of the CYP 1.35 mln proceeds will be used for acquisitions.
Spidernet plans to increase its capital by raising funds at EUR 0.17 per share through a rights issue and the relevant application is awaiting the green light from the stock market authorities. Serious investors and analysts should be encouraged by a number of facts, boding extremely well for SNET’s future, he said.
When the application was made, the relevant price of SNET was EUR 0.12 per share. Since Hermes Stephanou, holding 70% of the capital decided to commit himself and his family to the issue at a relatively high price, the gesture has sent a powerful signal to the market that he believes in the company’s future prospects and is willing to bankroll most of the fund raising.
Even more interesting is the decision by Laiki Investments (LI), the issue managers and advisors, to part-underwrite the issue. This was seen as a surprise decision, considering that following the amendment to the stock exchange law, local financial services companies rarely commit their own capital to new issues. SNET was last trading at EUR 0.17-0.18 per share.
